momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.It brings together, managers from the agricultural world and important people from external perspectives, such as health, development, strategy and defense. Its objective is to promote regulationof agricultural markets by creating new evaluation tools, such as economic models and indicators,and by drawing up proposals for an agricultural and international food policy.

Referendum on Britain’s exit from the EU:
What are the consequences for agriculture?

February 16, 2015

GREXIT, BRETIX… Today, it is increasingly common to hear about one nation getting out of the Euro Zone or the European Union. But what would be the consequences of Great Britain’s exit for the European or British agricultural markets? Some experts and qualified analysts on agriculture have addressed the issue, and the outlook could be worrisome.

Actually, the referendum on Britain’s exit from the EU could take place in 2017. If it garners widespread support and although the divorce would be “amiable”, the English and Scottish agricultural activities could seriously suffer. An exit from the EU “might leave producers to the mercy of the market”, while the country needs “a shield”, particularly through the CAP. This is the opinion expressed in early February by Richard Lochhead, Scotland’s Cabinet Secretary for Rural Affairs and Environment, and by the Irish economist Colm McCarthy, for whom achieving free trade in agriculture could prove to be especially problematic. Lastly, many feel that Britain’s food sovereignty would be at stake, due to increased reliance on imports and the lower number of farms.

Yet agriculture is a crucial segment of the British economy, and fully participates to its international competitiveness. According to the National Farmers Union (NFU) latest annual conference, its share in the UK economy grew by 54 percent between 2007 and 2012. In addition, British agriculture might be granted $29.8 billion in direct payments through the 2014-2020 CAP. These subsidies are vital for most British farmers, while only 10 percent of them can do without them.

In addition, the UK Department for Environment, Food and Rural Affaires (DEFRA) shows the vulnerability of the majority of farms. Over one fifth of mixed cattle and grazing farms did not report any profit in 2013/2014, while more than 20 percent of dairy farms reported net incomes below £25,000 (€31,738). The same applies to grain farmers: about 20 percent of them were not profitable in 2013/2014, against nine percent during the previous year. In all cases, the SPSs represent a significant share of gross incomes in farming. In addition, the British agriculture is not protected from upheavals. The recent milk crisis, which seems to be spreading to the whole Europe, has struck England and Wales. If no action is taken against falling prices, some experts are predicting that there will be less than 5,000 dairy farmers in the next five years.

In such environment and in case of BREXIT, how will British agriculture adjust, when it is confronted to the erratic market fluctuations? Because the supporters of an exit from the EU are also those who are fiercely opposed to CAP regulation mechanisms. Yet the perils of excessive liberalization are real: Letting markets decide the fate of British farmers would lead them one step closer to disaster.